Small to mid-sized businesses (SMBs) are currently navigating a challenging landscape when it comes to attracting and retaining talent. The “Great Resignation” has intensified the focus on retaining existing employees and attracting new talent. To address this, SMBs need to understand the key reasons employees decide to leave their jobs and prioritize initiatives that can enhance employee engagement and satisfaction. Mineral’s 2023 State of HR Report sheds light on these issues and highlights the importance of technology investment in addressing HR challenges.
Understanding the Top Reasons for Turnover
The report identifies the top two reasons for employee turnover: compensation concerns and relationships with managers. Other factors contributing to turnover include the lack of work-life balance, inflexible schedules, poor company culture, and a lack of growth opportunities. These findings underscore the need for SMBs to address these concerns proactively to boost recruitment and retention efforts.
The Disparity in Employee Desires and Company Approaches
The report reveals that retaining and engaging existing employees (87%) and attracting new talent (57%) are critical for business success. However, there are disparities between employees’ desires and the approaches taken by company leaders.
- Diversity, Equity, and Inclusion (DEI): While 80% of employees want to work for a company that values diversity, only 40% of respondents report that DEI initiatives have improved their ability to attract and retain talent. Furthermore, 33% have no plans to invest in DEI. Addressing this gap is essential in today’s diverse workforce.
- Mental Health Support: Mental health support plays a significant role in employees’ decisions to take or keep a job, according to 81% of respondents. However, 73% of those surveyed indicate that mental health is either not a top priority or not a priority at all. The well-being of employees should be a priority for SMBs.
The Importance of Employee Experience
The broader focus on DEI initiatives, mental health support, and remote work is part of the “employee experience” and is intrinsically tied to a company’s culture. A healthy culture attracts top talent and creates an environment where employees want to stay. As Susan Anderson, Chief Services Officer at Mineral, points out, listening to employees’ wants and needs is crucial for employers.
Key Findings and Areas for Improvement
The report highlights several key findings that can guide SMBs in addressing HR challenges:
- Reskilling: Over half of respondents (52%) consider reskilling employees important. However, 55% of SMBs report not having a formal training program. Developing training initiatives can empower employees and enhance their skills.
- Workforce Analytics: Only 14% of respondents view improving workforce analytics as a critical HR initiative. However, analytics tools that track employee productivity, mobility, pay, and skill level can help address recruiting and retention gaps.
- On-Site Workforce: More than 80% of employees continue to work exclusively on-site, despite data showing productivity gains from remote work. SMBs should explore productivity strategies beyond work location.
- Optimism: While 76% of respondents are optimistic about the business outlook over the next 12 months, SMBs face challenges in modernizing operations, particularly related to enhancing HR tools for people and productivity.
Modernizing HR Operations
The report reveals that nearly two-thirds of SMBs rely on spreadsheets and emails to manage HR initiatives. This reliance on outdated methods indicates the need for modernization. Furthermore, only 49% of respondents use automation and technology tools, including artificial intelligence, to streamline HR operations.
Barriers to Adopting Modern HR Solutions
Respondents identified several barriers to adopting modern HR solutions, including a lack of knowledge about available technology solutions (40%), distrust in AI (36%), resistance to technology (33%), and a lack of IT staff (25%).
Bridging Knowledge Gaps with AI Technology
To bridge knowledge gaps with AI technology, Anderson suggests the following strategies:
- Verify Accuracy: Generative AI can sound authoritative, but it’s crucial to verify answers for accuracy.
- Utilize Human Experts: Human experts provide essential context when crafting prompts for generative AI and validating answers.
- Ask Comprehensive Questions: Ask a wide range of questions, from simple to complex, while respecting ethical boundaries and setting guidelines.
- Prioritize Training: Involve your team in the AI technology adoption process and ensure they understand that AI is there to assist, not replace them.
Investing in Training
Investing in training is vital, and it starts at the top of the organization. In addition to training employees, investing in training for managers to be good people leaders is essential for cultivating a strong learning culture.
SMBs face significant challenges in retaining and attracting talent, and the 2023 State of HR Report by Mineral underscores the need for addressing these issues. By understanding the top reasons for turnover, closing gaps in technology investment, and prioritizing employee well-being, SMBs can navigate the evolving landscape of workforce management successfully. Bridging knowledge gaps with AI technology and investing in training are essential steps in modernizing HR operations and fostering a culture of continuous improvement in the workplace.